4 of 5 companies may hike deductibles due to Obamacare
Posted By Sarah Hurtubise On 4:48 PM 03/13/2014 In | No Comments
Four out of five U.S. companies have either already raised deductibles on their employee health plans or are considering it thanks to Obamacare, according to a survey of over 700 businesses by consulting firm Mercer LLC.
A third of the companies surveyed have already hiked deductibles or copays and another 48 percent are contemplating options that increase health-care payments by workers themselves, Bloomberg reports.
Health-care costs for customers and companies alike are continuing to rise, partly because of Obamacare-instated essential benefits that all health-care plans must now provide.
The more controversial benefits insurers must provide in all plans are pregnancy and child-care services, which have received pushback from men, women past childbearing age, and even nuns.
While the Obama administration has twice tried to delay enforcement of this rule, many state insurance commissioners rejected the delay in 2013 and plan to do so again this year.
Many U.S. companies are taking even more drastic action already. Large businesses like Target, Trader Joe’s and Home Depot have stopped offering part-time employees health insurance at all, instead encouraging them to opt for Obamacare exchanges instead.
UPS chose to cut its costs by dropping insurance for any employed spouses of their employees. Mercer found that 8 percent of employers have cut spousal coverage as well, and an additional 11 percent of companies are thinking about making such a change in 2015.
And while deductibles and copays may be going up for most employees, the caliber of plans may be going down. Businesses are worried about the so-called “Cadillac tax” and are ramping down their health-care coverage accordingly.
The Cadillac tax will hit businesses that already offer the best health benefits with a 40 percent tax. Companies that provide coverage over an annual value of $10,200 per year for individuals and $27,500 for families will pay the fees and pass $1,200 of them onto their employees per year, according to a report last year from Towers Watson.
Obamacare hits some employers for being too generous, others for not being generous enough.
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